Plaintiff in Qui Tam Action Should Not Have Voted, as a Water District
Board Member, In Favor of Waiving the District’s Attorney-Client Privilege,
Court of Appeal Says

By a MetNews
Staff Writer

LETICIA
VASQUEZ

Plaintiff

Los Angeles
Superior Court Judge Susan Bryant-Deason will be taking a second look at
whether to scrap a $2.75 million qui tam action against the law firms of
Buchalter, PLC, and Sedgwick, LLP, under a ruling of the Court of Appeal for
this district.

Plaintiff
is claiming in her whistleblower action that at a closed-door meeting on June
28, 2010, attorneys Douglas E. Wance of Buchalter and Curtis Parvin of
Sedgwick, who served as counsel to the Central Basin Municipal Water District,
met with the district’s then-general manager, Art Aguilar, and cooked up a
scheme. Under it, $1.75 million in district funds was diverted to Buchalter and
$1 million was routed to Sedgwick, according to the complaint, and used to pay
“associates, friends, political allies and other persons related to or
otherwise associated with” the respective law firms or Aguilar.

She
is seeking to recoup the funds for the district, while taking a cut for
herself.

Div.
One, on Thursday, said that Bryant-Deason’s May 19, 2016 overruling of
Buchalter’s demurrer and her denial of Sedgwick’s motion to dismiss were
predicated on her taking judicial notice of the decision of the district’s
board to waive the attorney-client privilege. However, that action by the board
was infirm, Acting Presiding Justice Victoria Chaney wrote, because Vasquez, a
member of the board, improperly cast a vote, and without that vote, the motion
would not have passed.

Judicial Notice
Taken

Bryant-Deason’s
May 19, 2016 ruling was in connection with the first amended complaint. She had
sustained Buchalter and Wance’s demurrer to the initial complaint on the ground
that, as it presently appeared, due process precluded the action because the
attorneys were powerless to mount a defense in light of the attorney-client
privilege.

Chaney
said that Vasquez, in voting to waive the privilege, had a conflict of interest
because absent that waiver, her qui tam action would have failed.

The
jurist did not discuss the effect of a subsequent vote by the board to waive
the privilege, with Vasquez not participating.

Chaney
pointed to Government Code §87100, a portion of the Political Reform Act of
1974 (“PRA”), which provides:

“No
public official at any level of state or local government shall make,
participate in making or in any way attempt to use his official position to
influence a governmental decision in which he knows or has reason to know he
has a financial interest.”

Explains
Conflict

She
wrote:

“Given
that Vasquez is the only party advancing the lawsuit, that petitioners’
demurrers to her initial complaint were sustained due to the barrier presented by
the attorney-client privilege to the defendants’ ability to defend the case,
and that Vasquez herself introduced the motion after the court suggested that
the board might waive the privilege, the conflict presented here is clear….The
express prayer set forth in the first amended complaint, for a portion of any
penalty awarded in accordance with the California False Claims Act (between 25
percent to 50 percent under the False Claims Act), provides a direct financial
incentive such that Vasquez should not have voted on the privilege waiver
motion pursuant to the requirements of the PRA.”

Vasquez,
a former mayor of Lynwood, was first elected to the board of the water district
in 2012. She is a professor of political science at El Camino College in
Compton.